Question about filing taxes first year as CR1 visa holder

[RazorFrazer 1]

Hey Guys. I got stamped at the border last year halfway through the year. Looking to do my taxes this year and although its ultra confusing, I think I have a handle on it.

 

Am I to file 1040 file joint married with my wife ? I have income earned as well as unemployment insurance from having a baby last year that was earned before I became a US resident, as well as income from my us employer.

 

Do I need to do 1040 by hand ? Write a letter to be considered a RA for the entire year? file 2555EZ to remove taxes on my Canadian income earlier in the year since I already paid Canadian taxes on it ? What about my health ? I technicially Landed 7/21/2016 and started getting health insurance 8/31/2016 (as well as my Canadian health insurance).

 

We tried doing this all on turbotax but we got stumped as it couldn't quite figure out our situation. When I entered foreign income and answered the questions it wanted me to go to IRS website and complete a 1040NR which I believe is incorrect.

 

My wife has an appointment with H&R block lady this morning because we were so confused. Let me know if im on the right track.

Edited April 10, 2017 by RazorFrazer

[Coco8 1,042]

The wording "nonresident" is tax terms is different from "nonresident" in immigration terms. Read here,

 

https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/Tax-Tips-for-Resident-and-Non-Resident-Aliens/INF19970.html

 

Here are some examples about filing taxes with USC partner, I hope they help:

https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse-treated-as-a-resident

 

Here is an old VJ thread with a similar question to yours. If you haven't earned money while in the US, maybe the "head of household" example works for you:

Because you entered the US mid-year and you had not been living in the US before, you should not report anything you earned in Canada before coming to the US. 

 

I hope this helps.

[RazorFrazer 1]

I was able to e-file with my wife. I guess they were able to find me with my SIN # even though its the first year im in the system. What happends next year for me since I did have some income come in January this year? I had one of my Canadian companies pay me out for some retirement benefits that I paid too much into. Also, this year I transferred my Canadian pension plan into a federal and provincial LIRA (I had two pensions). Will I have to declare that on my next tax return ? Thanks !

[Coco8 1,042]

46 minutes ago, RazorFrazer said:

I was able to e-file with my wife. I guess they were able to find me with my SIN # even though its the first year im in the system. What happends next year for me since I did have some income come in January this year? I had one of my Canadian companies pay me out for some retirement benefits that I paid too much into. Also, this year I transferred my Canadian pension plan into a federal and provincial LIRA (I had two pensions). Will I have to declare that on my next tax return ? Thanks !

 

I'm not Canadian so I have never done this before. You should read on the tax treaty with Canada. You might be tax exempt or have a reduced tax rate. See this,

 

https://www.irs.gov/publications/p597/ar02.html

 

 

[Wuozopo 4,293]

1 hour ago, RazorFrazer said:

I was able to e-file with my wife. I guess they were able to find me with my SIN # even though its the first year im in the system. What happends next year for me since I did have some income come in January this year? I had one of my Canadian companies pay me out for some retirement benefits that I paid too much into. Also, this year I transferred my Canadian pension plan into a federal and provincial LIRA (I had two pensions). Will I have to declare that on my next tax return ? Thanks !

 

And did H&R report your Canadian income which must be done if you filed jointly? 

You were on the right tax with TurboTax, but got off on it thinking you were a NR by not answering the questions appropriately. 

 

Your combined pension plan is only taxable if you collect from it. As long as it is just sitting there waiting for you to get old, then nothing on taxes.

[RazorFrazer 1]

I didn't end up going to H&R block because of the help I had from this forum.

 

I didn't report my Canadian income because I didn't earn any last year while I was a US Resident. Yeah I must of just answered the questions wrong.

 

My pension plan is currently in a LIRA which I plan to draw from once I have left Canada for 2 years.

[Wuozopo 4,293]

On April 10, 2017 at 7:34 AM, RazorFrazer said:

Do I need to do 1040 by hand ? Write a letter to be considered a RA for the entire year? file 2555EZ to remove taxes on my Canadian income earlier in the year since I already paid Canadian taxes on it ?

 

5 hours ago, RazorFrazer said:

I didn't report my Canadian income because I didn't earn any last year while I was a US Resident. Yeah I must of just answered the questions wrong.

You earned something in Canada in 2016 it seems.  So part of the rules for filing jointly and being treated as a resident alien for all of 2016 is both spouses must report worldwide income--anything earned in any country during 2016.  You can't use the benefit of the extra exemption and standard deduction for you, which basically reduced your spouse's taxable income and just ignore what you earned the first part of the year.  If you didn't earn any US income in 2016 and didn't want to report worldwide income, your spouse could file Married Filing separately. 

Edited April 11, 2017 by Wuozopo

[AstroCanada 206]

I just did this exact same thing this year, and I think we're in an almost identical boat.  I'm an American USC who worked in Canada part of the year.  My spouse (who I married mid-year) lived in Canada for all of 2016 and got his green card January 2017

Here's what we did:

1. Wrote an election to treat my non-resident alien spouse as a resident for tax purposes.
2. I used form 2555 to exclude my foreign income in Canada before I moved back.
3. I used form 2555 to exclude his foreign income in Canada for the entire year (He never was a US resident).

Doing this we benefited from the lower married filing jointly tax rates.  I think you'll do something very similar, except you immigrated to the US mid-year, so I don't think you need to do Step 1.

[RazorFrazer 1]

12 hours ago, Wuozopo said:

 

You earned something in Canada in 2016 it seems.  So part of the rules for filing jointly and being treated as a resident alien for all of 2016 is both spouses must report worldwide income--anything earned in any country during 2016.  You can't use the benefit of the extra exemption and standard deduction for you, which basically reduced your spouse's taxable income and just ignore what you earned the first part of the year.  If you didn't earn any US income in 2016 and didn't want to report worldwide income, your spouse could file Married Filing separately. 

So Since I already filed our joint taxes, I'll have to send an amended return through turbotax correct? I'll claim my Canadian income, write it off, and answer questions as if I have been a RA the entire year?

 

Even though I won't pay any tax on my Canadian income, it should have me taxed at a higher rate though correct? Will we incur any penalties for doing it wrong ?

 

Can I still e-file because it isn't april 15 yet? Or can I just use turbotax and then mail it in.

[AstroCanada 206]

On April 12, 2017 at 5:02 AM, RazorFrazer said:

So Since I already filed our joint taxes, I'll have to send an amended return through turbotax correct? I'll claim my Canadian income, write it off, and answer questions as if I have been a RA the entire year?

 

Even though I won't pay any tax on my Canadian income, it should have me taxed at a higher rate though correct? Will we incur any penalties for doing it wrong ?

 

Can I still e-file because it isn't april 15 yet? Or can I just use turbotax and then mail it in.

You plan sounds good from what I know.  You should file an amended return by paper.  I don't think you can amend electronically.  

[Wuozopo 4,293]

I have e-filed an amended return for somebody using TurboTax.

 

An amended return (form 1040X) is not just a redo. It has three columns and wants just the numbers off certain items like Adjusted Gross Income, Deductions, Taxable Income, Taxes, for instance. It wants the old number, new number, and the difference (+or -).  I found it easier to do a new tax return from scratch to figure out what my correct numbers were. Then with old and new side by side, I could find the numbers needed to fill in 1040X's three columns. 

 

 

[Wuozopo 4,293]

5 hours ago, Wuozopo said:

I have e-filed an amended return for somebody using TurboTax.

 

An amended return (form 1040X) is not just a redo. It has three columns and wants just the numbers off certain items like Adjusted Gross Income, Deductions, Taxable Income, Taxes, for instance. It wants the old number, new number, and the difference (+or -).  I found it easier to do a new tax return from scratch to figure out what my correct numbers were. Then with old and new side by side, I could find the numbers needed to fill in 1040X's three columns. 

 

 

Sorry, I said that poorly. I used TurboTax online to amend the return, but the actual forms have to be mailed to the IRS.